Contrasting Hanmi Financial (NASDAQ:HAFC) & PNC Financial Services Group (NASDAQ:PNC)

Hanmi Financial (NASDAQ:HAFC) and PNC Financial Services Group (NYSE:PNC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, analyst recommendations, institutional ownership, earnings and profitability.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Hanmi Financial and PNC Financial Services Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hanmi Financial 0 1 0 0 2.00
PNC Financial Services Group 0 7 5 0 2.42

Hanmi Financial presently has a consensus price target of $21.50, indicating a potential upside of 14.18%. PNC Financial Services Group has a consensus price target of $154.39, indicating a potential upside of 2.32%. Given Hanmi Financial’s higher probable upside, research analysts clearly believe Hanmi Financial is more favorable than PNC Financial Services Group.

Valuation and Earnings

This table compares Hanmi Financial and PNC Financial Services Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hanmi Financial $258.92 million 2.26 $57.87 million $1.90 9.91
PNC Financial Services Group $21.62 billion 3.10 $5.37 billion $11.39 13.21

PNC Financial Services Group has higher revenue and earnings than Hanmi Financial. Hanmi Financial is trading at a lower price-to-earnings ratio than PNC Financial Services Group, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Hanmi Financial has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. Comparatively, PNC Financial Services Group has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.

Insider and Institutional Ownership

88.7% of Hanmi Financial shares are held by institutional investors. Comparatively, 79.4% of PNC Financial Services Group shares are held by institutional investors. 2.9% of Hanmi Financial shares are held by company insiders. Comparatively, 0.4% of PNC Financial Services Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Hanmi Financial and PNC Financial Services Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hanmi Financial 14.93% 7.77% 0.79%
PNC Financial Services Group 24.83% 10.92% 1.33%

Dividends

Hanmi Financial pays an annual dividend of $0.96 per share and has a dividend yield of 5.1%. PNC Financial Services Group pays an annual dividend of $4.60 per share and has a dividend yield of 3.1%. Hanmi Financial pays out 50.5% of its earnings in the form of a dividend. PNC Financial Services Group pays out 40.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hanmi Financial has raised its dividend for 5 consecutive years and PNC Financial Services Group has raised its dividend for 9 consecutive years.

Summary

PNC Financial Services Group beats Hanmi Financial on 11 of the 17 factors compared between the two stocks.

Hanmi Financial Company Profile

Hanmi Financial Corporation operates as the holding company for Hanmi Bank that provides business banking products and services in the United States. The company offers various deposit products, including noninterest-bearing checking accounts, interest-bearing checking and savings accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. It also provides real estate loans, including commercial property, construction, and residential property loans; and commercial and industrial loans, such as commercial term loans and commercial lines of credit, as well as international finance, and trade services and products comprising letters of credit, and import and export financing. In addition, the company offers consumer loans that include automobile loans, secured and unsecured personal loans, home improvement loans, home equity lines of credit, unsecured lines of credit, and credit cards; and small business administration loans for business purposes, which comprise owner-occupied commercial real estate, business acquisitions, start-ups, franchise financing, working capital, improvements and renovations, inventory and equipment, and debt-refinancing, as well as equipment lease financing. As of January 24, 2019, it operated a network of 39 full-service branches and 9 loan production offices in California, Texas, Illinois, Virginia, New Jersey, New York, Colorado, Washington, and Georgia. The company was incorporated in 2000 and is headquartered in Los Angeles, California.

PNC Financial Services Group Company Profile

The PNC Financial Services Group, Inc. operates as a diversified financial services company in the United States. The Retail Banking segment offers deposit, lending, brokerage, insurance, and investment and cash management services to consumer and small business customers through a network of branches, ATMs, call centers, and online banking and mobile channels. The Corporate & Institutional Banking segment provides secured and unsecured loans, letters of credit, and equipment leases; and cash and investment management, receivables management, disbursement, fund transfer, information reporting, and global trade services, as well as foreign exchange, derivative, security underwriting, loan syndication, merger and acquisition advisory, and equity capital market advisory related services for corporations, government, and not-for-profit entities. This segment also offers commercial loan servicing and technology solutions for the commercial real estate finance industry. The Asset Management Group segment provides investment and retirement planning, customized investment management, private banking, tailored credit, and trust management and administration solutions; and multi-generational family planning products, such as estate, financial, tax planning, fiduciary, investment management and consulting, private banking, personal administrative, asset custody, and customized performance reporting services. This segment also provides chief investment officer, custody, private real estate, cash and fixed income client solutions, and retirement administration services; and mutual funds and investment strategies. The BlackRock segment offers single- and multi-asset class portfolios; and investment and risk management services technology platform. As of December 31, 2018, it operated 2,372 branches and 9,162 ATMs. The PNC Financial Services Group, Inc. was founded in 1852 and is headquartered in Pittsburgh, Pennsylvania.

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